Taskforce on Innovative International Financing for Health Systems: what next?
David McCoy a & Nouria Brikci b
a. Faculty of Public Health, University College London, London, England.
b. Save the Children UK, 1 St John's Lane, London, EC1M, England.
Correspondence to Nouria Brikci (e-mail: firstname.lastname@example.org).
(Submitted: 18 November 2009 – Revised version received: 27 January 2010 – Accepted: 02 February 2010.)
Bulletin of the World Health Organization 2010;88:478-480. doi: 10.2471/BLT.09.074419
The high-level Taskforce on Innovative International Financing for Health Systems was set up in 2008 and chaired by Gordon Brown, Prime Minister of the United Kingdom of Great Britain and Northern Ireland, and Robert Zoellick, President of The World Bank. Its aim was to identify innovative and additional sources of funding for health systems strengthening in the 49 lowest-income countries of the world. The taskforce delivered its final recommendations in September 2009 together with two detailed working group papers.1,2 Here we summarize the main outputs and recommendations of the taskforce according to three areas: (i) costing the financing gap; (ii) new and innovative sources of finance; and (iii) making development assistance for health work better (Box 1). We then examine their limitations and propose further actions for the international health community.
Box 1. Summary of recommendations by the high-level Taskforce on Innovative International Financing for Health Systems3
New sources of finance:
- Extend the mandatory solidarity levy on airline tickets to more countries (currently in place in several countries and used primarily to finance paediatric AIDS treatment through UNITAID);
- Explore the viability of levies on tobacco and currency transactions;
- Encourage voluntary private giving through: (i) voluntary levies on the purchase of airline tickets and mobile phone minutes (expected to raise US$ 3.2 billion by 2015); and (ii) a scheme called a “de-tax” which would earmark a share of value added tax receipts when participating businesses agree to add a share of their profits (estimated potential of US$ 220 million in 2010);
- Secure more private investment in health systems through establishing capital/risk mitigation fund(s). Out-sourcing to non-government providers and encouraging greater use of advanced market commitments, such as for vaccine purchases, were also mentioned as ways of securing investment from private sector actors.
Making development assistance for health work better:
- More frontloading (i.e. concentrating payments at the beginning of an agreement) and predictability of aid, possibly by expanding the mandate of the International Financing Facility for Immunization.
- Expand the use of results-based “buy-down” (use of grant funding to reduce the cost of loans when specific performance targets are met) funding and more performance-based donor funding for the health sector.
- Establish a common health systems funding platform for the Global Fund to Fight AIDS, Tuberculosis and Malaria, the GAVI Alliance and The World Bank.
- Undertake a review of technical assistance, in view of evidence that it consumes a large proportion of aid and appears to be poor value for money.
Gaps and challenges
Three issues stand out. The first relates to the models used for calculating the costs of scaling-up essential health services, including the assumptions on what is required to achieve that scale-up.1 The different models used by the taskforce did not just produce alternative costings, but also reflected different approaches to health systems strengthening as well as different levels of ambition.
The World Health Organization (WHO)’s normative approach, for example, was bolder and advocated the simultaneous scaling-up of facility and community-based services, while The World Bank and the United Nations Children’s Fund (UNICEF) were less ambitious and advocated expanding low-cost, community-based services before undertaking any strengthening or expansion of facility-based services. In addition to the confusion of having different costing models, the taskforce reveals fundamental differences in opinion about the minimum requirements to strengthen health systems and the best way to expand coverage of essential health services.
The second issue is that the individual country costings used to produce an aggregated “price tag” for all low-income countries are unavailable. And yet a full and proper discussion about the best way to fund and scale-up essential health services can ultimately only be conducted at the country level. In addition, the costings generated for health systems inputs such as “governance” are novel and need further empirical testing. A disaggregation of the data by country is therefore a vital next step.
Third, an implicit recommendation of the taskforce is that a significant proportion of funding should come from private expenditure, in spite of the need to reduce the burden of health expenditure on poor households. This suggests that the required future funding from governments and donors has been underestimated.
There are several problems with the recommended sources of new and innovative finance, namely; their lack of ambition, their orientation towards a voluntary and charitable approach (rather than one that is rights-based) and the largely consumption-based nature of the proposed levies.2
The opportunity to link revenue generation to a global redistributive and environmental agenda was ignored. The taskforce neither recommended carbon, luxury or capital flow taxes, reducing illicit capital outflows from low-income countries, nor did it recommend leveraging a higher domestic return on the natural resources and primary commodities of poor countries. Instead, the focus was mostly on low-value commercial transactions of ordinary consumers.
The idea of a currency transaction levy was barely supported despite its potential to raise as much as US$ 33 billion every year (even at a rate as small as 0.005%).4 The timidity of the taskforce is now more apparent in light of the current political momentum within the G-20 (Group of 20 industrialized and emerging-market countries) in favour of a higher rate currency transaction levy and additional financial transaction taxes that could also be used to regulate the global financial system.5
The suggestion to expand private (profit-seeking) investment through the use of public funds to mitigate risk was alarming. Low-income countries suffer from a lack of investment in public services combined with an unregulated commercially-driven health system. This recommendation would therefore make the problem worse.
Finally, the taskforce ignored the agenda of expanding the domestic resource base of low-income countries. Many of these countries could increase their volume of domestic public finance by reducing capital flight, promoting more effective tax policy and improving their tax collecting systems. Such an agenda would have the added benefit of placing greater attention on the broader challenges of economic development, and improving democratic and accountable governance. The reason why the taskforce excluded domestic finance from its remit is unclear.
More effective assistance
The recommendations for making development assistance more effective and efficient were undermined by inconsistencies and contradictions. One of the working group reports included an assessment of the evidence on several “controversies” about health systems development including: (i) the desirable mix of public and private financing; (ii) the desirability of expanding the for-profit sector; (iii) the appropriateness of scaling-up community-based health insurance; and (iv) whether and how vertical, disease-based programmes should be embedded into comprehensive health systems development.1
Despite commissioning this analysis, the taskforce appears to have disregarded the evidence by recommending the expansion of private (for-profit) investment finance. Similarly, the enthusiastic promotion of results-based funding does not tally with the more equivocal evidence on the effectiveness and efficiency of performance-based finance.6
However, the recommendation to create a common funding platform for health systems strengthening across the Global Fund to Fight AIDS, Tuberculosis and Malaria, the GAVI Alliance and The World Bank must be welcomed, given the current fragmentation and disorganization of development assistance for health. However, these agencies have, at best, a mixed track record on health systems strengthening.7 The lack of clarity about the way that this common funding platform would work in practice is therefore a limitation that requires further attention.
Given the scale of the world’s health challenges, it seems hard to escape the conclusion that the taskforce has turned out to be a major disappointment. It has not met its primary objective of raising significant new and more predictable finance for global health. Meanwhile, in the background, high-income countries continue to fall short of their responsibility to allocate 0.7% of their gross national income to development assistance.
In this context, innovative finance is a potential smokescreen for reneging on donor commitments (certainly the case with Italy), as well as a distraction from the need to create a new global agreement for a more systematic transfer of resources to low-income countries. Disappointingly, the taskforce chose not to build on the work of the WHO Commission on the Social Determinants of Health and to make an important contribution on the underlying structural determinants of under-resourced health systems.
The international health community, including WHO, should ignore many of the financing recommendations of the taskforce (with the exception of the half-hearted mention of a currency transaction levy) and focus instead on other actions that will provide a better political and economic environment for health systems in low-income countries. These include expanding the domestic finance base for development, reducing the loss of capital and resources from low-income countries and establishing principles and mechanisms for a more systematic transfer of resources from high-income to low-income countries.
The costing work of the taskforce was, however, more valuable and now needs to be developed. Specifically, country-specific data should be made available and should be used to support country-specific discussions about health systems and financing policy. WHO’s normative costing model would be a good starting point.
Finally, although the taskforce has helpfully pushed The World Bank, the Global Fund and GAVI to work in a more integrated manner, there is still a need to establish clearer principles and positions on health systems policy. The disjuncture between the evidence and the pro-market recommendations of the taskforce needs to be challenged, while a clearer normative vision on the key ingredients of an equitable, comprehensive, efficient and accountable health system is expressed.
- Taskforce on Innovative International Financing for Health Systems. Constraints to scaling up and costs: working group 1 report. Geneva: International Health Partnership; 2009. Available from: http://www.internationalhealthpartnership.net//CMS_files/documents/working_group_1_-_report_EN.pdf [accessed 27 April 2010].
- Taskforce on Innovative International Financing for Health Systems. Raising and channelling funds: working group 2 report. Geneva: International Health Partnership; 2009. Available from: http://www.internationalhealthpartnership.net//CMS_files/documents/working_group_2_-_report_EN.pdf [accessed 27 April 2010].
- Taskforce on Innovative International Financing for Health Systems. More money for health, and more health for the money: final report. Geneva: International Health Partnership; 2009. Available from: http://www.internationalhealthpartnership.net//CMS_files/documents/taskforce_report_EN.pdf [accessed 27 April 2010].
- Schmidt R. The currency transaction tax: rate and revenue estimates. Ottawa: North-South Institute; 2007. Available from: www.nsi-ins.ca [accessed 27 April 2010].
- Hutton W. Gordon Brown backs radical plan to transform global banking system, The Observer, 8 November 2009. Available from: http://www.guardian.co.uk/politics/2009/nov/08/gordon-brown-tobin-tax-plan [accessed 27 April 2010].
- Eldridge C, Palmer N. Performance-based payment: some reflections on the discourse, evidence and unanswered questions. Health Policy Plan 2009; 24: 160-6 doi: 10.1093/heapol/czp002 pmid: 19202163.
- Improving effectiveness and outcomes for the poor in health, nutrition, and population: an evaluation of World Bank Group support since 1997. Washington, DC: Independent Evaluation Group; 2009. Available from: http://siteresources.worldbank.org/EXTWBASSHEANUTPOP/Resources/hnp_full_eval.pdf [accessed 27 April 2010].